What Is a Certified Management Accountant (CMA)?
Certified management accountant (CMA) is an accounting designation that signifies expertise in financial accounting and strategic management. The professionals who obtain this designation are colloquially known as CMAs and are qualified for a variety of roles ranging from financial controller to chief financial officer (CFO).
- The certified management accountant (CMA) designation indicates expertise in financial accounting and decision-making.
- This certification prepares professionals for a wide variety of careers.
- CMAs are required to adhere to a strict set of professional standards, in addition to passing a rigorous two-part exam.
How Certified Management Accountants (CMAs) Work
The certified management accountant (CMA) certification, which is issued by the Institute of Management Accountants (IMA), builds on financial accounting proficiency by adding management skills that aid in making strategic business decisions based on financial data.
Oftentimes, the reports and analyses prepared by certified management accountants (CMAs) will go above and beyond those required by generally accepted accounting principles (GAAP). For example, in addition to a company’s required GAAP financial statements, CMAs may prepare additional management reports that provide specific insights useful to corporate decision-makers, such as performance metrics on specific company departments, products, or even employees.
Unlike the certified public accountant (CPA) certification, CMA certification is not mandatory for many jobs in finance.
As with other financial designations such as certified public accountant (CPA) or chartered financial analyst (CFA) certifications, certified management accountants (CMAs) are subject to a strict code of ethics. To obtain the CMA, candidates must have a bachelor’s degree or a related professional certification as well as two years of continuous work experience in a related field. Candidates must also pass a rigorous exam, which typically requires over 300 hours of preparation.
According to the Financial Industry Regulatory Authority (FINRA), CMAs must also hold active membership in the Institute of Management Accountants.
Real-World Example of a Certified Management Accountant (CMA)
Dorothy is an entrepreneur who manages a small construction supply company. Recently, she was invited to bid on a contract that would require her to significantly increase her number of employees. Although she felt that the project would be a great opportunity for her business, she wondered whether she would have the financial reporting capacity to effectively manage that increased headcount.
To help address this problem, Dorothy decides to hire Dennis, a certified management accountant (CMA). To obtain his designation, Dennis had to pass a two-part exam covering subject areas such as budgeting and forecasting, performance management, cost measurement, and internal controls. In interviewing for the position, Dennis argues that these skills would allow him to support Dorothy in assessing the costs and benefits of this new project, while also effectively managing the costs and logistics involved in servicing new customers.
With Dennis’s expertise, Dorothy is able to increase her team size without losing oversight of her internal costs and procedures. On the contrary, Dennis’s skill set provides newfound transparency to her business, allowing Dorothy to better assess the performance of individual team members and the profitability of specific projects.
In the future, Dennis’s combination of accounting skills and fluency with managerial decision-making puts him in a good position to adopt executive positions within the company or at another employer.
Certified management accountants (CMAs) and other accountants are expected to be in growing demand over the coming years. Between 2019 and 2029, the hiring of accountants is projected to grow by 4%. Due to the absence of standardization, this growth is expected to continue in the management accounting sector because companies have considerable freedom in designing management accounting systems.